Oil prices declined by 60 percent between February and April 2020 as the pandemic led to a collapse in global oil demand and concerns about storage capacity
Global oil prices are expected to stand at $41 bpd until the end of 2020 and to jump to $46 bpd over 2021, said Economist and Director of the Research Department at the International Monetary Fund (IMF) Gita Gopinat.
Gopinat made the comments in response to a question from Ahram Online during a press briefing held on Tuesday to release the Global Economic Outlook (WEO) report on the IMF projections for global oil prices after the recent cut in oil production.
According to the report, oil prices declined by 60 percent between February and April 2020 as the pandemic led to a collapse in global oil demand and concerns about storage capacity.
In March, OPEC+ (Organisation of the Petroleum Exporting Countries, including Russia and other non-OPEC oil exporters) could not agree on supply cuts to restore order to the market, but as the oil price fall intensified in mid-April, the cartel decided to curb production by 9.7 million barrels a day in May and June (later extended until July) by 7.7 million barrels a day until December 2020, and by 5.8 million barrels a day until April 2022, according to the report.
Gopinat stressed that the MENA region is among the regions hit significantly by the pandemic and by the cuts in oil production.
She added that the region needs to adopt smarter and more targeted lockdowns and to expend in hygienic procedures and to implement social distancing in a way that keeps people safe and at the same time does not affect economic activity.
In this regard, Deputy Director of the Research Department at the IMF Gian Maria Milesi-Ferrettisaid that the region is experiencing a tragic crisis and an economic decline, as the WEO report predicts the region’s economic growth to contract by 4 percent in 2020, which is a significant drop.
Milesi-Ferrettitold Ahram Online that maintaining support policies is essential for the region’s macro economy and for its recovery.
Gopinat said that developing a vaccine in the near future would add about $9 trillion to the global economy, while expanding in green investment is expected to create millions of jobs and accelerate the recovery.
She added that investing in digital transformation and health will also lead to a sustainable and inclusive global recovery.
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